CHDM notes fruitless and wasteful expenditure

Interest incurred on overdue account

hris Hani District Municipality (CHDM) incurred fruitless and wasteful expenditure of R25,730.74 in the 2023/2024 financial year.

This was revealed at an ordinary council meeting recently.

The council accepted the report and referred it to the municipal public accounts committee (Mpac) for further processing, in line with section 32 of the Municipal Finance Management Act (MFMA).

In presenting the item, CHDM executive mayor Lusanda Sizani said the first batch of fruitless and wasteful expenditure occurred in August 2023, where the municipality had to pay Eskom R3,509.61 for interest on an overdue account.

“In September 2023, Eskom was again paid an amount of R22,221.13 for the same reason of interest on an overdue account. Combined, the total lands at R25,730.74.

“The fruitless and wasteful expenditure has been reported in the Expenditure and SCM compliance reports and was given to council to refer to MPAC for investigation and to assess the write-off or recovery thereof in terms of MFMA section 32,” said Sizani.

He added that the decision to write

Coff an amount of R3,258,733 relating to fruitless and wasteful expenditure was taken in a council meeting held in May 2023. “The amount was explained as an opening balance from 2022 and the 2023 expenditure incurred interest.

“Management is reviewing the quarterly expenditure reports continuously on the fruitless and wasteful expenditure.

“Management discuss at departmental level and submit recovery plans to the finance department,” he said.

Sizani said the MFMA defined fruitless and wasteful expenditure as expenditure incurred in vain that could have been avoided had reasonable care been exercised.

“It is expenditure that has yielded no benefit by the municipality.

“A municipality must recover, among others, fruitless and wasteful expenditure from the person liable for the expenditure in question, unless, after investigation by a council committee, council certifies the expenditure as irrecoverable and writes the debt off,” he said.

Council noted and accepted the update on the fruitless and wasteful expenditure recovery process for the period ending September 30 2023 and also referred the report for further processing to Mpac.